Schwab Fundamental US Large Company takes a contrarian approach, fundamentally weighting its portfolio holdings and following a strict rebalancing schedule. Its broad reach, low turnover, and demonstrated ability to excel when valuations mean-revert make it an attractive option. It earns a Morningstar Medalist Rating of Silver.

The Russell RAFI US Large Company Index, which underpins this fund, weights constituents by their fundamentals, breaking the link between stocks' prices and portfolio weights. When the index rebalances, it effectively doubles down on stocks whose prices declined relative to their fundamentals and trims exposure to those on the rise. This buy-low tack positions the fund to capitalize on mean-reversion in stock valuations. However, it can extend too much rope to floundering firms and prematurely cut ties with winners. 

Leaning into stocks that look cheap steers this fund into value territory, but it mines the full value-growth spectrum for opportunities. The fund boosted stakes in highflyers Amazon.com AMZN and Alphabet GOOG at its March 2023 rebalance, for example, after both firms sank further than most over the prior 12 months. This broad scope is attractive compared with the Russell 1000 Value Index, which mechanically excludes the faster-growing half of the market. That has helped it measure up well against that benchmark in growth-friendly environments.

The fund's breadth extends across securities and sectors, too. Its top 10 holdings represented about one fifth of the portfolio as of May 2023, and no sector exceeded technology's 18% portfolio weight. 

This fund makes its bacon with abrupt periods of outperformance. It's constructed to benefit from distinct periods of mean-reversion, such as the aftermath of the early-2020 pandemic-fueled drawdown. Indeed, the exchange-traded fund shares ranked within the top decile of the large-value peer group from June 2020 through May 2023. The fund can look lethargic at times, but its breakout periods should compensate for its quieter stretches.

Analyst Rating

A well-diversified contrarian fund.

Analyst

Ryan Jackson

Apple

Microsoft

Berkshire Hathaway Inc. - Ordinary Shares - Class B

Exxon Mobil

JPMorgan Chase & Co

Wells Fargo

Amazon

Bank of America

Alphabet

A penchant for beaten-down stocks positions this fund to outperform the Russell 1000 Value Index when stock valuations mean-revert. Its broad scope should aid performance when they don’t. The fund earns an Above Average Process Pillar rating.

Above Average

Process

Schwab’s equity index portfolio management team remains strong, earning an Above Average People Pillar rating.

Chris Bliss leads Schwab's equity index team. Since joining Schwab from BlackRock in 2016, Bliss has strengthened the team by increasing specialization and automating more of the managers' workflow. This allows the managers to spend less time on routine tasks and helps them better identify and resolve issues that require their attention. Ferian Juwono, Sabya Sinha, Jeremy Brown, and Agnes Zau join Bliss as named managers on this fund. The named managers have support from associate managers who help the team prepare for index rebalances.

The team looks for ways to slightly improve returns by handling some corporate actions differently from the index. The managers can take advantage of those opportunities when they occur, under tight tracking-error constraints.

Schwab compensates its managers based on tracking error and compliance with risk management, which helps align their interests with investors'.

People

Under new but familiar leadership, Schwab Asset Management Solutions maintains its Above Average Parent Pillar rating. 

After the former Schwab CEO was named president of parent Charles Schwab Corporation in 2022, Omar Aguilar, a Schwab CIO since 2011, was promoted to CEO while retaining his CIO role. Under Aguilar's leadership, Schwab remains focused on core-oriented strategies: More than 95% of the firm's fund assets under management are in low-cost index products that are suitable for the biggest portions of investors' portfolios. Index-tracking remains are par with the best teams in the business.

Recent strategic initiatives show a desire to grow in an increasingly competitive landscape. Forays into direct indexing—which customizes separate accounts through tax-loss harvesting, values-based requests, or other client preferences—as well as some new launches, such as Schwab Municipal Bond ETF, fit the firm's strategic focus and are natural extensions of its capabilities. However, other recent launches in more-niche asset classes, including Schwab Crypto Thematic ETF, contrast previous refusals to enter trendy markets. 

Schwab benefits from its association with its parent's brokerage business. This arrangement and efficient operation allow funds to grow quickly and keep fees in line with larger competitors. Historically, Schwab has been quick to match competitor fee cuts and now sports a 0.09% asset-weighted average fee across its mutual funds and ETFs.

Parent

Schwab Fundamental U.S. Large Company Index ETF

FNDX tracks a fundamentally selected and weighted Russell index based on sales, cash flow and dividends/buybacks.

If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Schwab Fundamental U.S. Large Company Index ETF (FNDX), a passively managed exchange traded fund launched on 08/13/2013.

Should Schwab Fundamental U.S. Large Company Index ETF (FNDX) Be on Your Investing Radar?

Schwab Fundamental U.S. Small Company Index ETF

Schwab Fundamental US Broad Market Index ETF

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Schwab Fundamental Emerging Markets Large Co. Index ETF

Schwab Fundamental International Large Co. Index ETF

WESTLAKE, Texas--(BUSINESS WIRE)--Schwab Asset Management®, the asset management arm of The Charles Schwab Corporation, today announced index and fund name changes for the Schwab Fundamental Index* ETF and mutual fund suite, effective on or about June 21, 2024. Shareholders in the ETFs and mutual funds do not need to take any action. The changes are part of Schwab Asset Management's continual review of its product set to refine and enhance its product line-up. A total of 12 Schwab Fundamental I.

Schwab Asset Management Announces Index and Fund Name Changes to Its Fundamental Index ETF and Mutual Fund Family

Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the Schwab Fundamental U.S. Large Company Index ETF (FNDX) is a smart beta exchange traded fund launched on 08/13/2013.

Is Schwab Fundamental U.S. Large Company Index ETF (FNDX) a Strong ETF Right Now?

Schwab Fundamental U.S. Large Company Index ETF tracks the Russell RAFI™ US Large Company Index and has 730 holdings. The FNDX ETF is well-diversified across sectors and holdings, and shows attractive valuation metrics. FNDX has underperformed the Russell 1000 benchmark since its inception in 2013 and several factor-based ETFs since 2016.

FNDX: Fundamentals Are Attractive, Performance Is Not

The case for strategically allocating to equities in the New Year is supported by key macroeconomic and fundamental catalysts. The Schwab Fundamental U.S. Large Company Index ETF (FNDX) is a high-beta option for investors seeking large-cap exposure. U.S. corporate fundamentals remain resilient, with positive earnings growth and projections for the next 1-3 years, supporting the potential for capital appreciation over this duration.

FNDX: Tactical Exposure To High-Beta Large Cap, Equally Sported On The Strategic Side

iShares Core Dividend Growth ETF

iShares Select Dividend ETF

ProShares S&P 500 Dividend Aristocrats ETF

Schwab US Dividend Equity ETF

SPDR S&P Dividend ETF

Vanguard Dividend Appreciation ETF

Vanguard High Dividend Yield ETF

That's not a typical reaction, either from advisers or investors, especially when a group of stocks has underperformed the broad market by double-digit amount s— as many dividend-stock funds and ETFs have done over the last 12 months. But history suggests that these strategies could very well bounce back in a big way in coming months.

These dividend stocks and ETFs have healthy yields that can lift your portfolio

FNDX appears to be an alternative to broad-market index funds by using a unique methodology in selecting and weighting stocks. While this could be useful for some traders, it's not ideal for long-term investors. In this article, I will explain why this is so and what better alternatives exist for long-term holders.

FNDX: There Are Better Smart-Beta ETFs Out There

Amplify CWP Dividend & Option Income ETF

First Trust Value Line Dividend Index Fund

CBOE Vest S&P 500 Dividend Aristocrats Target Income ETF

Global X NASDAQ 100 Covered Call ETF

Global X Russell 2000 Covered Call ETF

Global X S&P 500 Covered Call ETF

KNG employs a buy/write strategy quite successfully, considering the small opportunity cost in relation to market total returns and the decent dividend yield over the years.

KNG: Not The Buy/Write ETF King

FNDX holds 700+ U.S. large-cap stocks weighted by leverage-adjusted sales, retained operating cash flow, and shareholder yield. Its expense ratio is 0.25% and the ETF has $10 billion in assets. I prefer forward-looking metrics, but FNDX trades at 17.79x forward earnings and is well-diversified across sectors and industries. Still, its 16.6% exposure to Technology stocks is too high.

FNDX: Key Insights Into This $10B Fundamentals-Based Fund

There's an ongoing debate about cap-weighted and smart-beta indexes, which look past crowd opinion to weight operating metrics like P/E, PB, P/S, and dividends. Rob Arnott challenged cap-weighted indexes as precipitating bubbles and created the RAFI index used by Schwab's FNDX and Invesco's PRF which have outperformed ordinary cap-weighted Value like VTV.

FNDX: Why This Smart-Beta ETF Should Beat Both VTV And VOO

Invesco Senior Loan ETF

iShares MSCI Canada ETF

iShares Core MSCI Emerging Markets ETF

iShares Core S&P Mid-Cap ETF

iShares Core S&P 500 ETF

iSh SP US PrfSt Shs

Invesco S&P 500 Equal Weight ETF

iShares 1-3 Year Treasury Bond ETF

 SPDR Blackstone Senior Loan ETF

As the Federal Reserve raised interest rates to combat inflation, NorthCoast Asset Management found opportunity in bond ETFs during the third quarter.

NorthCoast Ups Bond ETF Holdings In Q3

JPMorgan BetaBuilders Europe ETF

SPDR Bloomberg 1-3 Month T-Bill ETF

KraneShares CSI China Internet ETF

iShares iBoxx $ Investment Grade Corporate Bond ETF

iShares MSCI China ETF

Direxion Daily Semiconductor Bear 3x Shares

ProShares UltraPro Short QQQ

Vanguard S&P 500 ETF

Vanguard Tax-Exempt Bond Index ETF

Financial Select Sector SPDR Fund

For the sixth straight month, mutual fund investors were net redeemers of fund assets, withdrawing $102.2 billion from conventional funds for June. Fixed income funds (-$62.7 billion for June) witnessed net outflows for the seventh month in a row, while money market funds (+$23.5 billion) attracted net new money.

Conventional Fund Investors Move To The Sidelines And ETFs In June

FNDX has outperformed the broader markets this year. FNDX's portfolio is constructed on the basis of some useful fundamental screeners that could prove to be useful in a risk-off environment.

FNDX: Well-Positioned To Attract Flows In A Risk-Off Environment

FNDX is a rules-based ETF focused on three fundamental factors: leverage-adjusted sales, retained operating cash flow, and shareholder yield. Its expense ratio is 0.25% and has $10 billion in AUM.

FNDX: A $10 Billion ETF That Nicely Blends Value With Growth

With its expense ratio of 0.25%, which is quite thin for a smart-beta fund, FNDX has a portfolio with total net assets of $7.2 billion. The fund tracks the Russell RAFI US Large Company Index, a benchmark with a rather complex and thus beautiful methodology mindful of cash flows and leverage.

FNDX: Underfollowed Smart-Beta Fund To Consider

Schwab Fundamental U.S. Large Company Index ETF (FNDX) recently hit a 52-week high. Will it soar further?

Large-Cap ETF (FNDX) Hits a 52-Week High

SPDR Dow Jones Industrial Average ETF

SPDR Gold Trust

SPDR Bloomberg High Yield Bond ETF

Invesco QQQ

Schwab US TIPS ETF

Schwab Intermediate-Term US Treasury ETF

iShares 20+ Year Treasury Bond ETF

Markets took a drubbing during Lipper's fund flows week ended June 24, 2020 as investors focused on rising COVID-19 cases, increasing trade tensions, and a narrow rally in technology stocks that has been driving markets higher.

U.S. Weekly FundFlows Insight Report: Fund And ETF Investors Warm To Fixed-Income Funds For The Flows Week

Charles Schwab

Schwab U.S. Large-Cap Value ETF

The best Schwab ETFs to buy now offer a chance to beat the market going forward while retaining a value bent.
The post 4 Best Schwab ETFs to Buy Now appeared first on InvestorPlace.

4 Best Schwab ETFs to Buy Now

This large-cap ETF hits a new 52-week high. Are more gains in store for this ETF?

News for Schwab Fundamental U.S. Large Company Index ETF ETF (FNDX)